March 29, 2011 - Japan's dominant tobacco company on Friday said it would halt shipments of all its 97 tobacco products due to disruption from a huge earthquake and tsunami that struck the country two weeks ago.
Japan Tobacco (JT), which has a roughly two-thirds share of the domestic market and in which the government has a 50 percent stake, will temporarily halt shipments from Wednesday through April 10.
JT blamed serious disruption to supply chains and production issues after the 9.0-magnitude earthquake on March 11, which unleashed a massive tsunami that devastated swathes of the northeastern coast.
The company said it would temporarily limit output to its 25 key products such as Mild Seven and Seven Stars as it restocks product inventories to secure a stable supply of its top brands.
It blamed the 12-day shipment halt on "deteriorated distribution conditions", damage to facilities and scheduled blackouts following Japan's biggest ever recorded quake.
JT said time would be needed for damaged factories to recover.
It said the 25 key products that will temporarily become its focus will be sourced from factories in western Japan.
The 25 products cover approximately 65 percent of its consumer base according to shipment volume recorded last month, the company said.
More than 27,000 people are confirmed dead or listed as missing in Japan following the huge earthquake and the monster wall of water it unleashed.
Economists are reviewing daily their increasingly bleak forecasts for an economy that has seen infrastructure along the northeast coast shattered, and power outages in the Tokyo region. Firms have closed plants, hitting output.
Exports of key components and equipment used in the assembly of goods abroad, such as silicon wafers, liquid-crystal displays and electric machinery, have also been hit, last week sending shockwaves across global markets.
JT's factories at Kita-Kanto, Koriyama and Tomobe have suspended operations because of damage to the facilites, as has Tagajo factory of Nihon Filter, a JT group company. The extent of the damage is currently being assessed.
There was further damage to JT’s buildings in Morioka, Sendai, Mito and Utsunomiya sales offices, Sendai order processing center, and some distribution depots (located in Aomori, Morioka, Sendai, Mito and Utsunomiya) which belong to TS Network, a JT Group company, and some of these operations were suspended. JT is continuing production in each of the group’s factories west of Tokai District.
References: Japan Tobacco to halt shipments, www.channelnewsasia.com, 3/26/2011; Expressing their deepest sympathies to those who have been afflicted by the Pacific Ocean earthquake last Friday, Japan Tobacco today announced the presently known effect on the group.